The Dynamics Of Diversity
By
George H. Litwin, Ph.D.
THE PURRINGTON FOUNDATION
The Graduate Centre
Kathleen Lusk Brooke, Ph.D.
THE PURRINGTON FOUNDATION:
The Center for the Study of Success
T.R. Nelson
The British Broadcasting Corporation
For More Information On These Studies
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ABSTRACT
What organisational decisions actually cause diversity? Does diversity in
mix of employees lead to diversity in range of output? This paper puts for-
ward a set of hypotheses regarding the systems that generate (or limit)
diversity in organisations. Our client organisation is the British Broad-
casting Corporation (BBC), whose stated goal is to provide a broad, di-
verse range of programming—such diversity being appropriate to the
BBC's very broad and diverse audience. To achieve this goal, the BBC.
has set forth a human resources strategy of hiring and promoting diverse
groups of people. Their premise is that diversity of people, under certain
measurable conditions, will lead to diversity of output. Our model allows
experimental study of the effects of feedback on the dynamics of diversity.
This research is relevant to organisations concerned with diversity, with
matching their market composition, or with fostering innovation. Results
of recent studies will be available at the conference and by written re-
quest.
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The Law Of Adaptation And Growth
Systemic laws apply to any aggregate. The laws of system dynamics
are also the laws of organisation. The first law of organisations is the
law of adaptation and growth—social systems start with growth (For-
rester 1971). Growth is a feedback response of adaptation to positive
or success signals. The more an organisation or a business has suc-
cess in behaving in a certain way, it will replicate that approach. It
will replicate everything about that approach including profiling the
kind of input needed to achieve the success result. In so doing, it will
develop systems designed to create the expected result. Those sys-
tems will replicate themselves. And, most importantly, the entire or-
ganisation will become dedicated to repeating itself in its own image
and likeness until the input will only create a certain output. This out-
put will be highly successful in the short term.
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The Law Of Organisational Entropy
But, as Forrester notes, “A policy which produces improvement in the
short run, within five to ten years, is usually one which degrades the
system in the long run, beyond ten years.” And so, saturation and
decline follow.
Thus arises the second law of organisations, the law of organisational
entropy. The more we try to keep things the same, the more the out-
side universe becomes different. However much we struggle to main-
tain known and familiar structures, entropy corrodes our effort. This
can be disastrous or freshening.
The second law of organisations, the law of chaos, describes very real
organisational behaviours such as non-compliance with long-out-
moded policies, lack of trust in management—leading to little belief in
management communication, and the emergence of a wide array of
“influence networks.”
Why Diversity?
The effective achievement of diversity can be important to many kinds
of enterprise. For example, a financial services company needing to
mirror diverse customer cultures might create diversity in branch
operations and hiring (e.g., German-speaking, Spanish-speaking,
Japanese-speaking, etc.). Another example is public broadcasting,
where diversity of programmes is needed to mirror the diversity of the
society served.
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On the other hand, the rapid unleashing of diverse interests in a com-
plex institution can be seen as a direct path to chaos.
Our studies explore the dynamics of diversity in human organisa-
tions, especially large-scale aggregates such as corporate businesses
or governmental bodies. A case example, the British Broadcasting Cor-
poration (BBC), will demonstrate our hypotheses concerning the
relationship of diversity of input to diversity of output.
The Dynamics Of Diversity: A Case Example
A large public broadcasting organization, the BBC historically has
been heralded for its excellence. In response to such success feed-
back, systems have replicated themselves. Input has also been af-
fected. Not surprisingly, the BBC presently shows a non-diverse
demographic among its key output creators: programme makers,
producers, and senior management.
The BBC's strategy is to create the widest possible range of pro-
grammes. Since programming is created by people, the BBC has
developed a human resources strategy that emphasises employment
and promotion of diverse age, sex, ethnic, and interest groups.
The two key questions of our model:
1. Under what circumstances can diversity of input lead to
diversity of output?
2y ‘What leads to diversity of input?
The People System
Working with the personnel officers of the BBC, we have set forth a
working systems model (Beer et.al., 1984) of the organisational fac-
tors affecting the development of diversity. In order to generate diver-
sity, and for such diversity to have impact on the output of the
organisation, four factors must be present:
1. If the Flow System, the input and throughput of people, at-
tracts and retains various diverse groups in the population,
then diversity of people becomes possible. Although no
guarantee of diversity of output, diversity of input is a neces-
sary beginning. Therefore, diversity of people must be a
priority at each phase of people flow:
Recruitment,
Selection,
Hiring,
Development or Training, and
Termination.
All phases of people flow must demonstrate measurable diver-
sity in order to set the stage.
But input alone cannot guarantee the quality of output. The through-
put factors are determinate. That is, the structures of the internal
people systems must be calibrated to encourage diversity of output.
These factors are as follows: é
2. If the Reward System provides equal rewards and recogni-
tion to all the various diverse groups in an organisation,
then diversity is distributed in a way that is likely to in-
fluence diversity of output. Specifically, the rewards of impor-
tance have to do with promotion to programme-making and
management positions. Money is highly coincident; because
programmes are of the greatest value to the cus-
tomer/audience, those who make them, make the most
money. The relative diversity of the programme-maker and
management population can be measured by demographics
of age, background, sex, or other variables. Or, as a short-
cut, one can measure the diversity of the highest income
band in the organisation (vs. the lowest income band).
With Systems 1 and 2 we have the first real force in the dynamics of
diversity. That is, the extent of diversity in Flow and the quality of
Rewards creates Effective Diversity.
There are two other systemic factors that need to be present, however:
3. If the Work Design System allows opportunity for individual
creativity, then diversity of output will emerge. Diverse
people can make input to programme output.
4. If, through the Influence System, participation is en-
couraged in the organisation, members will provide input.
The greater the channels of upward feedback, the more in-
fluence such feedback has, and the stronger the voices of
diversity will be. If organisation members can react only to
the immediate environment around them, they will have
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little influence over events. If influence is at the divisional
level, then individuals will gain influence to patterns of be-
haviour. If influence goes all the way to the top, then
employees will have generative influence over systemic struc-
ture. (Senge 1990) At this level, diversity will have effects not
only in product output but also in organisational evolution
and renewal.
With Systems 3 and 4, the second force in the dynamics of diversity
is suggested. That is, Work Design allowing individual creativity and
Influence encouraging employee participation create Generative Op-
portunity. .
Achieving Measurable Diversity
While Systems 1 and 2 (Flow and Reward) can be measured quan-
titatively, Systems 3 and 4 (Work Design and Influence) are qualita-
tive. Behavioural scientists have developed observable descriptors,
but we prefer attitude and focus questionnaires that describe how
such systems are perceived by organisation members. These percep-
tions affect expectations and guide behaviour.
The two forces—Effective Diversity and Generative Opportunity
combine in a multiplicative way—if either goes to zero, the resultant
diversity is zero. Thus:
EFFECTIVE x GENERATIVE _ DIVERSITY
a
DIVERSITY OPPORTUNITY ~~ OF OUTPUT
(Demographic (Questionnaires)
Distribution)
Why Diversity Fails
In considering these laws of systemic structure and feedback, one can
immediately identify why most organisations fail to reach healthy
diversity and renewal. Organisations aggregate by reproducing
whatever works initially. Unfortunately, this can mean they restrict
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input of personnel to a certain kind of historically successful
demographic profile.
But many societies legislate some diversity of employment. Therefore,
organisations may be forced into accepting an increasing amount of
diversity. As we too often see, however, minority and disenfranchised
groups are hired, but restricted to lower-level positions. Such nominal
compliance with societal norms will not be economically productive.
On the other hand, the effective management of diversity will involve
some extent of cost. The alignment of diverse interests and ways of
doing things takes management time and substantial overhead
budget. “
Unless diversity can increase the capability of the organisation to
adapt to its changing marketplace, it is an obstacle to economic com-
petitiveness. That is, unless diversity of people can be translated into
productive and useful capability, both present capability and/future
potential, it is another entropic force—bringing chaos and disorder to
productive and respected institutions.
The Effects Of Feedback
Like all systems models, this model postulates that feedback will have
a decisive influence on the system conditions described above. In
general, positive feedback would lock in current system conditions
and patterns. Decision-making in the organisation would tend to
repeat that which had proven successful. Negative feedback would
cause uncertainty, and some degree of searching for alternative cour-
ses of action.
To test the hypotheses we have created, we have designed a simula-
tion exercise in which BBC personnel officers work in teams to make
human resource decisions in regard to strategic imperatives. Data
from this simulation exercise will allow us to further quantise our
model and thus make specific predictions regarding diversity of the
BBC programme output over the next ten years.
Feedback System
Within the simulation exercise, we have designed two distinct feed-
back scenarios:
Scenario I—Feedback on diversity of output only (audience
share and reach, that is, number of people and groups reached
by some programme)
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Scenario I—Feedback on diversity of input and output (all sys-
tems affecting diversity)
Within this design, we have essentially a four-cell table:
Positive Negative
Feedback Feedback
External Audience
Feedback
(Diversity of Output)
Internal Systems
Feedback
(Diversity of Input)
Conclusion
The forces affecting diversity in an organisation can be measured and
tracked. While equal opportunity can be legislated to some extent,
diversity in hiring does not ensure the distribution of diverse interest
groups throughout a complex institution. Further, even the distribu-
tion of diverse kinds of people in no way assures diversity of output.
Sophisticated assessment of internal systems such as work design
and influence is necessary to create what we have called Generative
Opportunity.
Whether diversity of input is a force for capability and future adapta-
tion or a block to competitiveness has to do with how such diversity is
introduced. System dynamics suggests that the mechanisms of feed-
back provide insight into the kind of system results that will be
achieved. Our experimental efforts can help us better understand how
feedback affects the ability to introduce and manage diversity.
As Forrester points out, it is intuitive to repeat behavior that creates
success. It is counterintuitive to change what is working. But only a
counterintuitive systems approach can lead organisations to effective-
ly employ diverse groups of people, and utilise such diversity in the
building of long-term capability for adaptation and growth.
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SYSTEM
Model Of People Systems That Cause Diversity
ma,
QUESTION
PEOPLE |!
FLOWS
Is Diversity Increased (Or De-
creased) By Decisions Regarding
Inflow and Outflow?
Are Rewards And Promotions
Equally Available To Diverse
Groups (Or Are Some Groups
Favoured)?
Are Jobs Structured To Encour-
age And Maxmise Individual
Creativity?
Are Employee Ideas And Hopes
Heard And Acted Upon, Particular-
ly Those Of Minority And Special-
Interest Groups?
FORCE
RESULT
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References
Beer, M., Lawrence, P., Mills, D., Walton, R., Managing Human
Assets, NY: Free Press, 1984.
Forrester, J., “Counterintuitive Behavior of Social Systems,”
Technology Review, Volume 73, Number 3, January, 1971.
Senge, P., The Fifth Discipline, “Prisoners of the System or Prisoners of
our own Thinking,” p. 52, NY: Doubleday, 1990.
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